The process of gambling reform in the Netherlands demonstrates a painfully typical four-way tug of war between (optically) mutually conflicting outcomes, which is adding to confusion and delay.

On the one hand the regulator has carefully developed a regime, in draft, to capture and control the significant grey market activity of Dutch nationals by recognising substantially all products within an open and comprehensive licensing code.

However, on the other hand, in the absence of a clear majority of political support, various political factions have added and now continue to add facets to the regime that make it highly unlikely to achieve the channelling objectives in which it has its origins.

The latest is a likely one-year delay imposed by the Senate this week, in order to debate further the terms of the proposed legislation, meaning that implementation is unlikely to take effect even next year. The outcome of impending national elections may cause further deterioration in this timeline.

The three-year target for this legislation, set without dispute in 2015, was to channel 70% of online activity into domestically licensed operations.

Consequently, 2019 implementation is going to be a disappointment; if no longer a surprise. Further, in an effort to optimise tax revenues and level the playing field with landbased supply, Parliament (Q1 2016 and well known) increased the proposed online duty from 20% to 29%. The effect of this will be to limit the number of profitable domestically licensed operators to a handful (at most). While this will have little short/medium-term effect (other than higher tax yields for the state), in the longer term, the lack of competition, limitations on marketing budgets and domestic profit to reinvest, is likely to stifle domestic capabilities in favour of black market operators (and certainly disfavour potential ‘domestic’ operators, which may create jobs as well as tax). This trend could be further (and more immediately) exacerbated if stringent social responsibility measures are implemented, which may drive ‘heavy users’ to unencumbered unlicensed sites where their play will be untaxed and (largely) unmonitored.

An inability to balance the requirements of comprehensive licensing (and therefore channelling), social responsibility, tax and special interest groups is an increasingly common problem. In the short-term, .com operators will probably be relieved at the delays in tax and regulatory interference. However, in the longer term, the more political a regulatory process becomes, the results are nearly always (far) less favourable for commercial licensed operators.